Follow the money as summit enters home straight at the Paris climate summit

Jeremy Leggett for Recharge Magazine: We are half way through the summit. The heads of state and government have departed and their ministers have arrived, aiming to agree the final treaty text. There is a mood of cautious optimism in the air. Much of the media commentary around the world is reflecting this relatively upbeat assessment, at the time of writing. There is ample space, of course, for government officials to mess up this outcome in the week ahead. Old agendas and empathies could overcomplicate concessions in the negotiating endgame. Clever saboteurs could have a good day. But one thing has become abundantly clear in the first week in Paris. Civil society is going to have as much a say as governments, if not much more, in defining the course of the post-Paris world.
In energy, the source of most greenhouse-gas emissions, this is particularly clear. Let me consider progress in the first week by regulators, cities, financial institutions, and non-financial corporations.
Potentially the biggest news of all, in terms of potential impact, is that the man responsible for the stability of the global capital markets, Bank of England Governor Mark Carney, has the bit between his teeth on accelerating the retreat of capital from fossil fuels. He came to Paris to announce the creation of a taskforce to advise companies on climate risk and how to respond to it. Climate change is a central issue for the financial markets in three ways, he says. The first is the physical risk. The direct threat to the insurance industry is a good example of this. The impacts of Hurricane Katrina were 30% worse because of sea level rise. The second is the liability risk. Just look at the questions coal companies are now facing from their investors. The third involves the risks around the energy transition. Will it be smooth or abrupt? Minds should be focused on the scale of stranded issues today and the scope for adding to them with capex investments tomorrow, he continued.
The taskforce will be looking at how best to stimulate the switch from carbon fuels to clean energy, and the transparency and disclosures investors will need in order to get the markets moving. The Bank of England has asked Michael Bloomberg, former mayor of New York, and no stranger to global capital markets, to chair the taskforce. He does so as a strong advocate both for action on climate change by local government, and the wider business community.
Later the same day fully a thousand mayors announced that their cities were pledging to 100% renewable power targets. Paris itself led this charge.
As for the people who must bankroll all this transition, I have never seen so many senior executives from financial institutions at a climate summit. All talk of “whether” seems to have disappeared from their discourse. The focus today is on “how”, “how much” and “when.” It is easy to see why. More than 500 institutions with assets worth $3.4trn have now pledged to divest from fossil fuels. That’s up from $2.6trn and 400 commitments just 10 short weeks ago.
As for those who are staying invested, and engaging with fossil-fuel companies, I sense a new assertiveness in the air. There seems little doubt now that the hundreds of billions currently being invested in clean energy are en route to becoming the trillions that the energy transition will need.
As for the corporates, yesterday I watched senior executives from Google, Facebook and Statoil on the same platform. Nobody who heard the two Silicon Valley giants talking the same language as the oil and gas major could have any doubts about the direction of travel, and the potential speed, of the energy transition.
And the renewables industries that stand to benefit so much from all this? There seems to be a possibility that we are getting our own act together too. The launch event for the Global Solar Council yesterday saw 17 national and regional solar associations from around the world, both in established and emerging markets, including China and India, form a lobbying alliance.